Taking into consideration the Bank’s country assistance strategy, this report examines whether Afghanistan’s PA has access to the services it needs from international and national consultants under Bank and Afghan procurement regulations. It is based on a mission that visited Afghanistan from November 21 to December 3, 2006; due to the security situation in Afghanistan and travel restrictions, the mission was limited to Kabul. The mission met with government agencies’ staff, international consultancies currently implementing donor-financed projects in Afghanistan, academic institutions, the private sector firms (in particular Afghan consultancies), non-governmental organizations (NGOs), associations, and with the resident missions of the European Commission, GTZ, ADB, and DFID (the list of persons met is attached to the report as Annex 1).
The report investigates both the capacity and competence of the purchaser (PA) and also the ability of suppliers (consulting firms) to provide the required services. The Bank’s selection procedures and the Government’s (GoA) policy, laws, rules of procedure, and practices are examined to determine whether they (1) lead to efficient consulting contract awards8 and (2) support the development of local consulting firms. The demand and the supply of international and domestic consulting services are assessed. In addition, this assessment identifies the risks concerning the current Bank capacity-building strategy and the key constraints that hamper the evolution of the domestic consulting sector.
Suggestions are provided on what the GoA and the Bank could do to create an environment suitable for (1) qualified international consultants and (2) the development of sustainable local consulting capacity necessary to help Afghanistan to implement its reform programs.
Bank Task Team Leaders (TTLs) interviewed for this report stressed the need to flexibly apply the 2004 Bank Guidelines on Selection and Employment of Consultants in Afghanistan due to the weak national institutions and the high risk of conflict. However, neither the Bank’s approach to Low-Income Countries Under Stress (LICUS), of which Afghanistan is a severe case, nor its response to crises or emergencies allow for disregarding the Guidelines. The Bank’s approach to LICUS only suggests outsourcing procurement functions in post-conflict environments.9 The Bank’s rapid response to crises and emergencies is designed to facilitate the Bank’s rapid response to emergencies and is limited to the immediate aftermath until regular procurement procedures can be used without comprising the timely delivery of assistance.10
Nonetheless, the Bank’s procurement tools to cope with crises and post-conflict countries have been useful in assessing the main obstacles to efficient consultants’ selection in Afghanistan and providing recommendations for this report. The Bank’s response to crises and emergencies suggests the following procurement-related activities: (1) increased flexibility in the use of simplified procurement methods; (2) outsourcing of procurement and the ability to draw on pre-qualified procurement and project management agents through sole-source (SSS) or qualification-based (CQS) selection; (3) sole sourcing of consulting firms already working in the area and which have a proven track record for the provision of technical assistance; (4) extension of contracts issued under existing projects for similar activities through increase in their corresponding contract amounts; and (5) encouraging Bank teams working on emergency operations to actively support counterpart agencies at various stages of the procurement process, including preparation of ToR, RFP, and drafting of shortlists.
Weighing QBS against QCBS
The use of Quality- and Cost-Based Selection (QCBS) has recently been questioned by many Bank TTLs in view of the high deviations in proposal prices observed in consultants’ selections. As a result, quality becomes less decisive since price turns out to be the overriding selection factor in many cases. This may lead to poor proposals gaining the highest overall score and thus to poor quality services. The prudent use of Quality-Based Selection (QBS) could reduce this risk by placing the main focus on quality. The benefits of using QBS should particularly be considered for major capacity-building or management/procurement agent services, which generally have a strong impact on the development of the PA and the implementation of projects.
GoA Policy on Consultants
The GoA has not yet developed a specific policy on consultants, which could form the basis for a legal and regulatory framework that effectively addresses the needs of the PA and the consulting firms. The 2005 Public Procurement Law only reflects basic policy principles for selection of consultants while the new ‘Rules of Procedures’ (see paras. 22) provide the procedures of consulting services in details. However, a review has not been conducted yet covering
The domestic consulting sector, its characteristics, and its capacity to implement assignments funded by the GoA; or
The quality of services that consultants have already provided to the public sector.
To date, no consultant association has been formed in Afghanistan that could participate in a public sector dialogue on policy and contribute views on regulatory issues. Considering the weakness of the few existing consulting companies, it is presently too early to establish a consulting association in Afghanistan.
Recommendation:
Once ministries have clearly defined their mandates and their respective functions, a review of the range of services that local consulting firms could provide to the PA should be performed to decide which functions could be outsourced to local consultants. The GoA may then wish to consider drafting a strategy/policy paper on professional and expert consultants in the medium term to meet the specific needs of the PA and to encourage the creation of local consulting firms. The policy on consultants could cover the following areas:
Outsourcing: Relying on present public sector reforms, the policy should indicate areas and functions for which the GoA will require the support of professional and expert consultants;
Management & Capacity Development: Drawing on experience with present public administration reform programs and its recommendations on common functions like HR planning and management, the policy should address capacity building of the PA through training and incentives;
Enabling Environment & Policy Dialogue: The policy should foresee means for an institutionalized public-private dialogue. This dialogue should explore opportunities for developing a favorable fiscal and employment policy for consulting firms.
